Jaitley tries to soothe frayed nerves of global automakers

Ban on large diesel vehicles a transient phase, says Jaitley

Finance Minister Arun Jaitley has played down the ban on registration of new large diesel-powered vehicles in Delhi, saying it is a "transient" phase and India is a market large enough not to adversely affect auto companies.

Jaitley, who arrived in Tokyo on Sunday on a 6-day trip to woo investors, is scheduled to meet Suzuki Motor chairman Osamu Suzuki.

"I think the Indian auto sector is extremely comfortably placed. This is all transient phase which happens and I don't think that with the kind of large market that Suzuki has, it is in any way likely to be adversely affected," he said.

He was asked about his meeting with Suzuki amid policy uncertainly in India after the ban on diesel vehicles of over 2,000 cc in the national capital region of Delhi and Kerala to curb pollution.

The ban on sale of large diesel cars and sport utility vehicles with engines of two litres or more was first imposed in December and was recently extended to Kerala. The one in Kerala, however, has been temporarily stayed by the state high court.

It has led to some automakers reworking their plans and introducing models with petrol options or smaller diesel engines.

Maruti Suzuki India chairman R C Bhargava had last month termed the ban as "totally arbitrary".

Stating that cars are universally targeted for causing pollution as they represent "the well-off section of society", he had reasoned that cars contributed to only around 2 per cent of pollution in the capital. Also, "nothing has been done about polluting old cars".

Maruti Suzuki, the country's leading automaker, has about 60 per cent of market share for petrol vehicles while for the diesel segment, the share stands at 28 per cent.

Earlier this month, the world's largest automaker Toyota said the restrictions would be the "worst advertisement of India".

Image used for representation purpose only.

Photograph: Mike Stone/Reuters